Here’s Why Apple’s iPad Sales Are Falling
Apple (NASDAQ:AAPL) saw a decline in iPad sales for the first time according to its recently released third-quarter results. The Cupertino, California-based company sold 14.6 million iPads during the June quarter, 2.4 million less than the amount it sold in the same quarter last year.
Although this statistic alarmed some Apple watchers, the year-over-year decline in iPad sales is hardly surprising considering the fact that Apple released a new iteration of its tablet in March 2012. In this sense, comparing iPad sales figures from the June quarter in 2012 to the same quarter in 2013 is like comparing apples to oranges.
However, it should also be noted that the majority of the iPad sales drop is directly attributable to a “1.9 million unit channel inventory swing,” as stated by Chief Financial Officer Peter Oppenheimer during the third-quarter results conference call, Yahoo Finance reports. “We built 1.2 million units of iPad channel inventory in the June quarter last year whereas we reduced channel inventory by 700,000 units in the June quarter this year.”
CEO Tim Cook also noted the impact of the year-over-year channel inventory difference on the iPad’s sales figures. “We had 2.4 million unit decline but 80 percent of that, or 1.9 million units were just due to changes in channel inventory,” Cook said in a conference call with analysts, via Seeking Alpha. Taking the channel inventory change into account, the iPad units’ sell-through only declined by 3 percent.
Oppenheimer also cited the high level of customer satisfaction with the iPad, reminding investors, “For the second consecutive time in the two year history of a survey, iPad ranked No. 1 in the 2013 U.S. tablet satisfaction survey by J.D. Power and Associates.” The Apple chief also referred to a recently released study by market research firm Chitika that found the iPad accounted for an 82.4 percent share of total North American tablet Web traffic in May.
Besides attributing the drop-off in iPad sales to the lopsided year-over-year comparison and channel inventory differences, the Apple executives also pointed out the iPad’s recent gains in the education market. Last month, the Los Angeles Unified School District awarded Apple a $30 million contract to provide its students with iPads.
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